The carbon dioxide (CO2) industry relies mostly on by-product sources, the largest sector from fermentation which relies in turn on the gasoline market. Also, by-product from ammonia and reformer operations are two additional major by-product sectors.
Natural sources have often been the saving grace when by-product sources have been idled, reduced in capacity or suddenly closed. These natural sources found in places such as the mid-south, Rocky Mountain area of New Mexico and Colorado, Utah, and Arizona represent a significant percentage of the total. The ethanol sector over-built during the rapid build-up through the 1990s-2000s, and have consolidated more than once since then. Today, a few ethanol plants for CO2 are dormant, which in turn has placed pressure on markets such as the Northeast/New York, and California. Despite all of this, the ethanol sector continues to bring online new merchant sources, such as Poet’s more recent plants, one of which in Portland, Indiana, of 200 tpd (tons per day), and other efforts to reopen other ethanol plants which will have CO2 by-product for the markets.
During the pandemic, the ethanol sources for CO2 felt the worst pressure, due to a sharp reduction in gasoline consumption, and export restrictions. The ammonia sector in places such as Augusta, Georgia and particularly Hopewell, Virginia had annual turnarounds which caused shortages of merchant CO2 availability for the region, which led to product allocations, freight surcharges, and sometimes lack of product for the customers.
The ammonia sector was experiencing normal plant turnarounds, however, at very inconvenient times, which paralleled ethanol by-product shortages; making for a sort of ‘perfect storm’ in terms of product unavailability.
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